FORMER PENSION BOARD SIX WIN RULING

San Diego must pay their legal expenses

San Diego has to pay the legal fees for a half-dozen former members of the pension board who fought criminal charges in state and federal court for five years, a Superior Court judge has decided.

The ruling was handed down last week by Judge William Dato. It means the city is liable for at least $5.4 million in costs for six former board members who faced criminal charges that were ultimately dismissed.

The city could appeal the ruling and run the risk of incurring more fees if the ruling is upheld.

City Attorney Jan Goldsmith was not available for comment on the ruling Monday.

The issue is scheduled to be discussed today in a closed session of the City Council.

Dato’s ruling is the latest turn in the long-running battle over paying legal fees for former city employees who were targeted in two criminal cases stemming from the city’s pension fiasco.

While the city has had to pay out millions in fees to defendants who were named in civil lawsuits, this suit was different in that it dealt with costs for defending criminal cases.

State law generally requires cities to pay legal bills for employees who are sued, but it gives municipalities the option on a case-by-case basis of whether or not to do the same in criminal cases.

The six defendants — Cathy Lexin, Ronald Saathoff, John Torres, Mary Vattimo, Teresa Webster and Sharon Wilkinson — were charged by District Attorney Bonnie Dumanis in 2005 for violating the state conflict of interest law.

Prosecutors said the defendants voted in favor of a plan to let the city save money by putting less money than needed into the pension system — in exchange for enhanced retirement benefits for themselves and others. Webster, Saathoff and Lexin were also indicted in federal court on different charges stemming from the same actions.

The state Supreme Court dismissed the charges against all but Saathoff in 2010, and a few months later Dumanis dropped the case against him. That same year a federal court judge threw out the federal charges.

The resulting dispute over the legal fees turned on a 2002 resolution passed by the City Council that indemnified pension board members from any “claim or lawsuit” that arose after the vote on the city plan.

Lawyers for the city contended that the resolution was never intended to cover criminal cases — only civil. Lawyers for the defendants argued the resolution’s scope was broad and should cover criminal cases as well.

In a November tentative ruling, Dato seemed to side with the city. But in a ruling issued Thursday ﻿he concluded that given the “broad language and expansive purpose” of the resolution, it can’t be judged to apply only to criminal cases.

Under state law, cities can opt not to pay employee defense costs in criminal cases under certain circumstances, but those circumstances were not met in this case, Dato said.

Bob Rose, a lawyer for Torres, said that the final amount the city will have to pay still has to be worked out. The amount could be higher as a result of the costs for filing this suit to get the fees paid, he said. Another hearing is set for April 27.

As of now, the fees for each defendant range from $513,000 for Wilkinson to $989,527.75 for former fire union leader Saathoff and $1.4 million for Lexin.